What Is Factories Act, 1948? Key Provisions and Latest 2026 Update

Short Summery

The Factories Act, 1948 was created to protect workers by setting rules for safety, working hours, leave, and workplace conditions in factories. In 2026, many of these rules changed after the new OSHWC Code came into effect, making it important for employers and HR teams to understand the latest factory compliance laws.

Introduction

If you’re searching for Factories Act 1948, factory compliance rules in 2026, or the latest updates under India’s new labour law framework, there’s one major change every HR professional, factory owner, and compliance manager should know about.

The rules related to factory registration, worker safety, overtime, working hours, welfare facilities, annual leave, and labour law compliance have changed a lot after the implementation of the OSHWC Code, 2020 in late 2025. But many businesses are still following old information, which creates confusion about what rules actually apply in 2026.

So, what exactly changed?
Which factory rules are still important today?
Who comes under the new employee limits?
And why are companies now focusing more on compliance tracking, digital records, and HRMS software?

Before thinking the old law is completely irrelevant, there’s an important reason why employers, HR teams, and compliance experts still refer to it even today.

What is the Factory Act 1948?

The Factories Act, 1948 was a landmark labour law introduced by the Government of India to regulate working conditions in factories and protect the health, safety, and welfare of workers employed in manufacturing establishments. Enacted on 23 September 1948 and implemented from 1 April 1949, the Act created a structured legal framework for factory operations across India.

The law laid down important compliance requirements related to workplace safety, cleanliness, ventilation, hazardous processes, welfare facilities, working hours, overtime wages, annual leave, and employment conditions for women and young workers. It also defined the duties and responsibilities of factory owners, occupiers, and managers to maintain safe and legally compliant working environments.

Although the Factories Act, 1948, has now been replaced by the Occupational Safety, Health and Working Conditions Code, 2020 (OSHWC Code), it continues to be widely referenced by HR professionals, compliance teams, legal experts, and factory owners for understanding the evolution of factory laws and workplace compliance in India.

Click link to download the Factory Act 1948 PDF 

What are the Objectives of the Factories Act, 1948

The objectives are not listed in a single section, but they are clear from the Act’s structure and key provisions.

1. Worker safety

Reduce industrial accidents by requiring fencing of machinery, safe floors and stairs, precautions against dangerous fumes, explosive dust, and fire, and specific rules for hazardous processes.

2. Worker health

Ensure cleanliness, ventilation, temperature control, safe drinking water, and adequate sanitation to prevent occupational diseases and unhealthy environments.

3. Welfare and dignity

Require washing facilities, first‑aid, canteens, rest rooms, crèches, and welfare officers above certain worker thresholds, supporting workers’ basic comfort and family responsibilities.

4. Fair working conditions

Set ceilings on weekly and daily hours, mandate rest intervals and weekly holidays, and provide paid annual leave after a minimum number of days worked.

5. Prevention of exploitation of women and children

Prohibit employment of young children, regulate adolescent work, and place additional restrictions and safeguards around women’s employment, especially in dangerous processes.

Applicability: Which Factories Were Covered?

Under Section 2(m), a “factory” meant premises, including precincts, where a manufacturing process was carried on and:

• 10 or more workers were working (or had worked on any day of the preceding 12 months) with the aid of power, or
• 20 or more workers were working (or had worked on any day of the preceding 12 months) without the aid of power.

The Act explicitly excluded mines, railway running sheds, and certain hospitality establishments, and it clarified that a mere electronic data processing or computer unit did not make premises a factory if no manufacturing process was carried on there. Several state amendments allowed governments to tweak thresholds within limits or extend coverage to smaller premises under Section 85.

For many years, this meant typical “small” businesses without a qualifying manufacturing process or below the thresholds did not fall under the central Factories Act, although states could extend coverage in specific cases. This historic position is important when comparing to the OSHWC Code thresholds today.

Key Definitions of Factory, Worker, Occupier, and Manufacturing Process under Factory Act 1948

Understanding four core definitions helps both HR and operations teams.

1. Factory

As noted above, the definition focused on premises where a manufacturing process was carried on and a minimum number of workers were employed, with power/no‑power thresholds and specific exclusions.

2. Worker

A “worker” meant any person employed, directly or by or through any agency (including a contractor), whether for remuneration or not, in a manufacturing process or in work incidental to it, excluding members of the armed forces. This wide wording ensured that contract labour and indirectly engaged persons were still protected.

3. Occupier

The “occupier” meant the person who had ultimate control over the affairs of the factory; for a company, any one of the directors was deemed to be the occupier, and for government‑owned factories, the person appointed to manage affairs was treated as the occupier. Many legal duties and liabilities in the Act were pinned on the occupier.

4. Manufacturing process

“Manufacturing process” covered making, altering, repairing, finishing, packing, cleaning or otherwise treating any article or substance for use, sale or transport, plus pumping, power generation and transmission, printing, ship repair, and cold storage. This broad definition brought a wide range of industrial activities within the factory law framework.

What are Major Provisions on Health, Safety, and Welfare?

1. Health provisions

Chapter III required each factory to be kept clean and free from unhealthy effluvia, and specifically addressed:

• Regular removal of dirt and refuse, cleaning of floors and workrooms
• Adequate ventilation and a reasonable temperature
• Control of dust and fumes and rules on artificial humidification
• Prevention of overcrowding, proper lighting, safe drinking water, and adequate latrines and urinals

These provisions were meant to prevent health hazards and create a basic level of hygiene at work.

2. Safety provisions

Chapter IV set out detailed safety requirements, including:

• Fencing of machinery and precautions around work on or near machinery in motion
• Rules for hoists, lifts, lifting machines, chains, ropes, and tackles
• Safety of floors, stairs, and access routes
• Protection against dangerous fumes, gases, explosive or inflammable dust, and fire
• Powers for inspectors to require testing and specifications for potentially unsafe machinery

States could also declare “dangerous operations” and prescribe additional protective measures.

3. Hazardous processes

A later insertion, Chapter IVA, focused on “hazardous processes” in certain industries. It required:

• A site appraisal mechanism and disclosure of information about hazards by the occupier
• A written health and safety policy, on‑site emergency plans, and permissible exposure limits for toxic substances
• Worker participation in safety management and a right to warn about imminent danger

This is where the Act most clearly resembled a modern risk‑management framework.

4. Welfare measures

Chapter V required:

• Washing facilities and arrangements for storing and drying clothing
• Facilities for sitting, first‑aid appliances, and display of related notices

For larger factories, thresholds triggered extra requirements:

• Canteens in factories with more than 250 workers (as per state rules)
• Shelters, rest rooms, and lunch rooms where more than 150 workers were ordinarily employed
• Crèches where more than 30 women workers were employed
• Welfare officers where 500 or more workers were employed

These provisions linked welfare obligations to factory size and composition.

Factory act 1948 ARRANGEMENT OF SECTIONS 

Working Hours, Overtime, and Leave Under the Factory Act 1948

1. Working hours and rest

Chapter VI set the classic working‑time rules many employers still associate with factory law:

• Weekly hours: An adult worker could not be required or allowed to work more than 48 hours in a week.
• Daily hours: Generally not more than 9 hours in any day, with rules on spread‑over and rest intervals.
• Weekly holiday: At least one whole day off in a week, with conditions for substitutions.

Overlapping shifts, double employment, and certain night‑shift arrangements were restricted to prevent excessive working time.

2. Overtime

If an adult worked beyond the 9‑hour day or 48‑hour week, Section 59 entitled the worker to overtime wages at twice the ordinary rate of wages. Rules on registers and notices required employers to show working periods and overtime in a transparent way.

3. Annual leave with wages

Chapter VIII provided that:

• A worker who had worked for at least 240 days in a calendar year was entitled to annual leave with wages in the following year.
• For adults, the usual formula was one day of leave for every 20 days of work; for children, one day for every 15 days.

The Act set rules on payment during leave, payment in advance, and recovery of unpaid leave wages.

Exclusions and Special Cases in Factory Act 1948

The Factories Act did not automatically apply to all establishments.

• It excluded mines (covered separately), railway running sheds, and certain hotels, restaurants, and eating places.
• Section 85 allowed state governments to apply the Act to premises not otherwise covered if certain conditions were met, even when worker numbers were below the usual thresholds.
• Section 86 permitted exemptions for public institutions, subject to conditions.

In practice, this meant some small or atypical establishments could be brought in or left out depending on state decisions, which is why employers always needed to check both central and state rules.

2025–26 Legal Update: OSHWC Code and Repeal of the Factories Act

What changed on 21 November 2025?

The OSHWC Code, 2020 consolidates 13 central labour laws, including the Factories Act, into a single framework covering occupational safety, health, and working conditions. The central government’s notification brought the Code into force on 21 November 2025, and Section 143 provides that the enactments specified in its schedule, including the Factories Act, 1948, stand repealed from that date.

For HR and compliance teams, this means that from late 2025 onwards, central factory‑related obligations are derived from the OSHWC Code and the rules framed under it, not from the old Factories Act. However, many concepts such as health, safety, welfare, working hours, and leave continue in modernised form, so the historical Act remains a useful reference point for understanding the structure of obligations.

Occupational Safety, Health and Working Conditions Code, 2020: PDF Download

Factory definition and thresholds under the OSHWC Code

Under the OSHWC Code, the general definition of “factory” uses higher worker thresholds than the old Act.

• The typical threshold is 20 or more workers where a manufacturing process is carried on with the aid of power, or 40 or more workers where it is carried on without the aid of power.
• At the same time, establishments employing 10 or more workers must apply for registration under the Code within a specified period (such as 60 days from coming into existence) under Chapter II.

The Code also continues the clarification that the mere presence of computers or an electronic data processing unit does not turn premises into a factory if no manufacturing process is carried on. This matters for IT and services companies that use large amounts of digital equipment but do not engage in manufacturing processes.

Modernised compliance model

The OSHWC Code introduces several structural changes that affect employers:

• Single registration and licensing across multiple labour laws, with an emphasis on all‑India licensing for certain categories.
• Greater digitisation, including electronic submission of returns and records.
• Appointment of Inspector‑cum‑Facilitators, with a more risk‑based, technology‑enabled inspection system.

Penalties have been rationalised and generally increased, with minor offences often compoundable but serious safety or accident‑related violations attracting significant fines and possible imprisonment.

Worker‑facing changes

Some key worker‑facing updates compared with the old Factories Act include:

• Appointment letters: Employers are required to issue letters of appointment to employees, improving transparency about terms and conditions.
• Annual leave: Eligibility for annual leave with wages in many contexts is linked to 180 days of work in the calendar year, rather than the 240‑day threshold under the Factories Act.
• Women’s employment: The Code allows women to work in all types of establishments and for all types of work, including before 6 a.m. and after 7 p.m., subject to their consent and prescribed safety safeguards.
• Child and adolescent labour: The Child and Adolescent Labour (Prohibition and Regulation) Act, 1986, as amended, now provides the core rules, prohibiting employment of children in any occupation or process (with narrow exceptions) and restricting adolescents from hazardous occupations and processes.

These changes aim to modernise the law while retaining the core idea that workplaces must be safe and dignified for all workers.

Frequently Asked Questions